Russians on red alert as rouble is reinvented

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The Independent Online
Nerves are jangling in Russia over tomorrow's introduction of the new rouble. As Phil Reeves reports from Moscow, it comes at a jittery time.

Amid deep suspicion and considerable grumbling from those who will use it, Russia's kopek will tomorrow be brought back to life after an absence of some six years.

The resurrection of the coin comes with the redenomination of the rouble, which has acquired an ungainly trail of zeros after tumbling spectacularly in the first half of the decade.

From New Year's Day, the rouble will lose three of its noughts. A pair of jeans that now costs the daft-sounding 400,000 roubles should, if all goes well, retail at a more respectable 400. With an anticipated six roubles to the dollar, the kopek will be worth a mighty one sixth of a cent.

But that "if" is, in the eyes of many Russians, alarmingly large. Distrust of the government runs deep when it comes to money.

Two previous changes in the currency in the last seven years were badly mishandled and led to panic. Millions will never forget how hyperinflation of up to 2,600 per cent a year wiped out their savings, vaporising an estimated total of $17bn.

Since then, the government has restored the rouble to stability by maintaining it within a corridor, a policy that has helped pull inflation down to less than 12 per cent this year.

But it has not been easy, particularly in the last few months. The fiscal crisis in South-east Asia sent foreign and domestic investors scurrying back into the safer arms of the dollar, prompting Russia to pour several billion dollars of its reserves into defending the rouble.

When Mikhail Gorbachev tried to reduce money supply in January 1991 by ordering the population to hand in 50- and 100-rouble notes, there was chaos, largely because he only gave them three days to do so.

The Yeltsin administration is trying to make a better fist of things. The old roubles will circulate alongside the new for a year, and it will be possible to exchange them in banks for five years.

The government has run an advertising campaign, commandeering revered Soviet-era actors to issue televised assurances that there is no cause for people to be alarmed.

Russians remain sceptical, however. The reaction of Marina Dobkina, 49, a school director, was typical: "Nothing will change for the better. Prices will go up. Though all actors announce on television that nothing will change, prices are growing just before the event. The leaders never miss a chance, do they?"

The Central Bank's new notes look very like the old ones. This is sensible, though dull. Over the years, Russia has had some eccentric currency. In 1896, the 100- rouble note was printed in a rainbow of colours, with Catherine the Great in the centre. In 1919, when the Bolsheviks harboured ambitions of world revolution, the Soviets produced notes with the hammer and sickle on the front with the slogan "Workers of the World Unite" in Russian, Chinese, Japanese, French and Italian. Lenin didn't appear on money until 1938.

The new Russia has produced notes boringly ornamented by the national flag flying over the Kremlin.